A-1260-84
CNCP Telecommunications (Appellant)
v.
Alberta Government Telephones and Canadian
Radio-television and Telecommunications Com
mission (Respondents)
and
Attorney General of Canada (Intervenor)
INDEXED AS: ALBERTA GOVERNMENT TELEPHONES V.
CANADIAN RADIO-TELEVISION AND TELECOMMUNICATIONS
COMMISSION (F.C.A)
Court of Appeal, Pratte, Heald and Urie JJ.—
Calgary, October 28 and 29; Ottawa, December 4,
1985.
Telecommunications — Interconnection — Undertaking of
Alberta Government Telephones (AGT) operated as integral
part of national telecommunications system — Providing local
and long distance services — Microwave towers used to send
messages outside Alberta — Error by Trial Judge in conclud
ing AGT Crown agent not bound by Railway Act so that
CRTC lacking jurisdiction — In creating AGT, Alberta legis
lature intended corporation to operate local undertaking — In
operating federal undertaking, AGT stepped outside authority
of purposes for which created and cannot invoke status as
Crown agent to avoid laws applicable to federal undertakings
— Alberta Government Telephones Act, R.S.A. 1980, c. A-23,
ss. 1(c),(d) (as am. by S.A. 1983, c. 5, s. 2), 2(1) (as am. idem,
s. 3), (2), 3(1) (as am. idem, s. 4), (2),(3), 4(1), 9(1)(d), 24, 42(1)
— Public Utilities Board Act, R.S.A. 1980, c. P-37, ss. 1(i),(j),
70(1)(c), 77(1), 81(a) — Railway Act, R.S.C. 1970, c. R-2, s. 5
— Interpretation Act, R.S.C. 1970, c. I-23, s. 16.
Constitutional law — Distribution of powers — Provisions
of Railway Act applicable to telecommunication carriers
within legislature jurisdiction of Parliament — Whether
Alberta Government Telephones (AGT) local undertaking
which Parliament not empowered to regulate — Trial Judge
finding AGT's undertaking connecting Province with others —
AGT member of unincorporated organization (TCTS) permit
ting integrated coast to coast telephone network — Wrong to
look only at part played by AGT in providing services — Use
of microwave towers to send messages out of Alberta — AGT
not local undertaking — CRTC having jurisdiction to deal
with CNCP's interconnection application — Constitution Act,
1867, 30 & 31 Vict., c. 3 (U.K.) (R.S.C. 1970, Appendix II, No.
5J (as am. by Canada Act 1982, 1982, c. 11 (U.K.), Schedule to
the Constitution Act, 1982, Item 1), ss. 91(29), 92(10)(a),(b),(c)
— Railway Act, R.S.C. 1970, c. R-2, s. 5.
Crown — Prerogatives — Whether Alberta Government
Telephones (AGT) as Crown agent bound by Railway Act —
Interpretation Act, s. 16 providing Her Majesty not bound by
enactment unless mentioned — Trial Judge concluding Crown
not mentioned in Railway Act — Eldorado Nuclear Ltd. case
authority for proposition Crown agent corporation benefiting
from Crown immunity only when acting within scope of pur
poses empowered to pursue — AGT created to operate provin
cial undertaking — Eldorado case discussed — AGT having
exercised powers in manner inconsistent with purposes for
which created — Status as Crown agent lost — Alberta
Government Telephones Act, R.S.A. 1980, c. A-23, s. 42(1) —
Public Utilities Board Act, R.S.A. 1980, c. P-37 — Combines
Investigation Act, R.S.C. 1970, c. C-23, s. 32(1)(c) — Criminal
Code, R.S.C. 1970, c. C-34, s. 159(1) — Broadcasting Act,
R.S.C. 1970, c. B-11 — Interpretation Act, R.S.C. 1970, c.
I-23, s. 16 — Railway Act, R.S.C. 1970, c. R-2, s. 5.
This is an appeal from an order of the Trial Division,
reported at [1985] 2 F.C. 472, prohibiting the CRTC from
hearing an application made by CNCP Telecommunications.
CNCP sought various orders requiring Alberta Government
Telephones (AGT) to provide it with interconnection services.
The Trial Judge held that AGT, being a non-local undertaking,
was subject to federal legislative jurisdiction. She concluded,
however, that the CRTC lacked jurisdiction because AGT, as
an agent of the Crown, was not bound by the Railway Act.
Reed J. accordingly granted AGT's application for a writ of
prohibition.
Held, the appeal should be allowed.
Under subsection 91(29) of the Constitution Act, 1867,
Parliament is given exclusive authority to legislate in relation to
matters excepted from the jurisdiction of provincial legisla
tures, such as undertakings "connecting the Province with any
other or others of the Provinces, or extending beyond the Limits
of the Province" as provided in paragraph 92(10)(a) of the
Constitution Act, 1867. The Trial Judge determined that AGT
engaged "in a significant degree of continuous and regular
interprovincial activity" and had, for that reason, to be classi
fied as a non-local undertaking. The Trial Judge did not base
her conclusion on the nature of the services provided by Trans-
Canada Telephone System (TCTS), an unincorporated entity
composed of various telecommunication companies, including
AGT. Rather, her conclusion was based on the fact that AGT's
undertaking was operated as an integral part of a national
telecommunication system. That fact was not seriously chal
lenged and, in the Court's opinion, supported her conclusion.
That conclusion is further sustained by the fact that in operat
ing its undertaking, AGT regularly makes use of its microwave
towers to send messages to points located outside Alberta. This
clearly shows that AGT's undertaking connects Alberta with
other provinces.
The appellant's submission that the Crown is bound by the
Railway Act is based on the decision of the Supreme Court of
Canada in The Queen in the Right of the Province of Ontario
v. Board of Transport Commissioners, and on the wording of
section 5 of the Railway Act. The Board of Transport Com
missioners decision cannot be relied upon since the text of
section 16 of the Interpretation Act applicable in that case was
different from the text of the present section 16.
Section 5 of the Railway Act provides that the Act applies to
all persons except "Government railways". It is contended that
the exception would have been unnecessary had the words
"persons" excluded Her Majesty. Although the exception may
perhaps be necessary, it cannot be inferred from it that Parlia
ment clearly intended the Railway Act to apply to the Crown.
The statutes are replete with provisions and exceptions not
strictly necessary and inserted ex abundanti cautela.
The appellant's main argument is that in operating its under
taking as it did, AGT was acting outside the scope of the public
purposes it was statutorily empowered to pursue and therefore
cannot claim the benefit of Crown immunity. The argument is
based on the principles enunciated in the Supreme Court of
Canada decision R. v. Eldorado Nuclear Ltd. It was stated
therein that statutory bodies are entitled to Crown immunity
when they act within the ambit of Crown purposes, since they
are then acting on behalf of the Crown. Pursuant to subsection
42(1) of the Alberta Government Telephones Act, AGT was
made an agent of the Crown; however, it was not expressly
made an agent of the Crown "for its purposes" as that latter
expression was used in the statutory provisions making the
companies dealt with in Eldorado agents of Her Majesty.
However, this difference in the language does not render
inapplicable the principles set out in Eldorado. When a legisla
ture creates a corporation for certain purposes and makes it an
agent of the Crown, it must be assumed that the legislature did
not intend the corporation to act as an agent of the Crown if it
"stepped outside the ambit of the purposes for which it was
created". The words "for its purposes" are to be implied in
subsection 42(1).
It is apparent from the provisions of the Alberta Government
Telephones Act that the legislature of Alberta, in creating
AGT, intended that corporation to establish and maintain in
the province a telecommunication system that would be regu
lated under the Public Utilities Board Act of the province. As
the only undertakings that may be regulated under that Act are
those that are not described in paragraphs 92(10)(a),(b) and
(c) of the Constitution Act, 1867, it follows that the legislature
intended AGT to operate a local undertaking and that AGT, in
operating a federal undertaking, stepped outside of the author-
ity of the purposes for which it was created. It therefore cannot
invoke its status of Crown agent so as to dodge the laws that
are applicable to federal undertakings.
CASES JUDICIALLY CONSIDERED
APPLIED:
R. v. Eldorado Nuclear Ltd., [1983] 2 S.C.R. 551.
DISTINGUISHED:
The Queen in the Right of the Province of Ontario v.
Board of Transport Commissioners, [1968] S.C.R. 118.
CONSIDERED:
Canadian Broadcasting Corporation, Television Station
C.B.O.F.T. et al. v. The Queen, [1983] 1 S.C.R. 339.
REFERRED TO:
Province of Bombay v. Municipal Corporation of the
City of Bombay and Another, [1947] A.C. 58 (P.C.); Her
Majesty in right of the Province of Alberta v. Canadian
Transport Commission, [1978] 1 S.C.R. 61.
COUNSEL:
C. R. O. Munro, Q.C. and Michael Ryan for
appellant.
John Rooke, C. K. Irving and Peter McIntyre
for respondent Alberta Government Tele
phones.
Gregory van Koughnett for respondent
Canadian Radio-television and Telecommuni
cations Commission.
Eric Bowie, Q.C. and Donald Rennie for
intervenor.
SOLICITORS:
Canadian Pacific Law Department, Toronto,
for appellant.
Burnett, Duckworth & Palmer, Calgary, for
respondent Alberta Government Telephones.
Canadian Radio-television and Telecom
munications Commission, Legal Services, for
respondent Canadian Radio-television and
Telecommunications Commission.
Deputy Attorney General of Canada for
intervenor.
The following are the reasons for judgment
rendered in English by
PRATTE J.: This is an appeal from an order of
the Trial Division [[1985] 2 F.C. 472] prohibiting
the Canadian Radio-television and Telecommuni
cations Commission from hearing an application
made by CNCP Telecommunications.
By that application, CNCP sought various
orders against Alberta Government Telephones
(AGT) for the purpose of achieving the inter
change of telecommunication traffic between the
telecommunication system operated by CNCP and
that operated by AGT. That application was based
on certain provisions of the Railway Act [R.S.C.
1970, c. R-2] which apply to telecommunication
carriers within the legislative jurisdiction of the
federal Parliament.
AGT applied to the Trial Division for a writ of
prohibition. It contended that the CRTC had no
jurisdiction in the case, first, because AGT is a
provincial and local undertaking which the Consti
tution does not empower Parliament to regulate
and, second, because AGT is an agent of the
Crown in right of Alberta and, as such, is not
bound by the relevant provisions of the Railway
Act. That application was heard by Madam Jus
tice Reed of the Trial Division. In very carefully
written reasons, she rejected AGT's constitutional
argument and held that AGT was not a local
undertaking; however, she agreed with AGT's
second contention and concluded that the CRTC
had no jurisdiction in the matter because AGT, as
an agent of the Crown, was not bound by the
relevant provisions of the Railway Act. She
accordingly granted AGT's application and made
the order against which this appeal is directed.
It is the contention of the appellant that the
Trial Judge erred in deciding that AGT, as an
agent of the Crown, was not bound by the relevant
provisions of the Railway Act. As will appear
later, the appellant's main argument in support of
that contention is based on the assumption that the
learned Judge correctly found AGT to be a non-
local undertaking. As that finding is challenged by
AGT, it will be necessary to consider that question
before turning to the appellant's grounds of
appeal.
I—IS AGT A LOCAL UNDERTAKING?
Under subsection 91(29) of the Constitution
Act, 1867 [30 & 31 Vict., c. 3 (U.K.) [R.S.C.
1970, Appendix II, No. 5] (as am. by Canada Act
1982, 1982, c. 11 (U.K.), Schedule to the Consti
tution Act, 1982, Item 1)], the federal Parliament
has the exclusive power to make laws in relation
to:
91....
29. Such Classes of Subjects as are expressly excepted in the
Enumeration of the Classes of Subjects by this Act assigned
exclusively to the Legislatures of the Provinces.
Thus, Parliament is given exclusive authority to
legislate in relation to, inter alia, the undertakings
described in paragraph 92(10)(a) since that para
graph makes certain exceptions to the power of the
provincial legislatures to legislate in relation to
"Local Works and Undertakings":
92. In each Province the Legislature may exclusively make
Laws in relation to Matters coming within the Classes of
Subjects next herein-after enumerated; that is to say,-
10. Local Works and Undertakings other than such as are of
the following Classes:—
a. Lines of Steam or other Ships, Railways, Canals, Tele
graphs, and other Works and Undertakings connecting the
Province with any other or others of the Provinces, or
extending beyond the Limits of the Province:
The contention of AGT is that its undertaking is
purely local and, as a consequence, subject to the
exclusive legislative authority of the province of
Alberta.
The contention of the appellant, which found
favour with the Trial Judge, is that AGT's under
taking is subject to federal legislative jurisdiction
because it is an undertaking "connecting the Prov
ince with any other or others of the Provinces, or
extending beyond the Limits of the Province".
AGT was created in 1958 by an Alberta statute,
the Alberta Government Telephones Act,' to oper
ate a telegraph and telephone system in the prov
ince. AGT in effect owns and operates such a
system providing its customers with both local and
long distance services. In order to be in a position
to provide more than merely local service, it joined
with eight other telecommunication companies in
an unincorporated organization, originally named
TransCanada Telephone System (TCTS), which
was created in order to permit the establishment of
an all-Canadian long distance integrated telephone
network from coast to coast.
AGT's undertaking is described by Reed J. in
her reasons for judgment in a manner that all
counsel acknowledged to be both accurate and
complete. That description is too long to be repro
duced here. However, the learned Judge summa
rized it in the following\words [at pages 478-479]:
Summarizing some of the salient facts: the telecommunica
tions facilities of AGT are physically connected to the systems
of other telecommunications carriers outside the province of
Alberta: by microwave at two places on the Saskatchewan
border, at two places on the British Columbia border, at one
location on the United States border and at one location on the
border with the Northwest Territories, and by buried cable
across the borders at various points. In describing this
microwave linkage as physical I am using that word in its
broadest sense. I am not unmindful of Lord Porter's comments
in Attorney-General for Ontario v. Israel Winner, [1954] A.C.
541 (P.C.) at page 574, that to characterize the flow of an
electric discharge across the frontier of a province as a physical
connection is a fanciful suggestion. However, it is clear from
the Supreme Court decision in Capital Cities Communications
Inc. et al. v. Canadian Radio-Television Commn., [1978] 2
S.C.R. 141 at page 159, that the technology of transmission is
not the legislatively significant factor.
AGT takes signals emanating from its subscribers telephone
sets and transmits them to points outside Alberta; it takes
signals emanating from outside Alberta and transmits them to
the intended receiver in Alberta; and in some cases it may
transmit signals through Alberta.
AGT's physical telecommunications facilities not only con
nect at the borders, there is also a more pervasive integration.
The same telephone sets, line, exchanges and microwave net
works are used for the provision of local and interprovincial
services as well as international ones. It is clear that many AGT
employees are involved in the provision of both intraprovincial
and extraprovincial services without distinction.
On the organizational level there exists an unincorporated
entity, TCTS [TransCanada Telephone System], composed of
' S.A. 1958, c. 85, now R.S.A. 1980, c. A-23, as amended.
the various member telecommunications carriers, each having
an equal voice. This organization, of which AGT is an integral
part, both at the managerial level and seemingly at the staff
level, engages in planning for the construction and operation of
the overall network which is comprised of each members'
facilities; sets technical standards; establishes terms and condi
tions under which telecommunications services will be provided
by the members; performs a joint marketing function; deter
mines rates; acts as the pivotal entity for negotiating and
implementing agreements for the provision of international
services; operates a system of revenue sharing through the
TCTS Clearing House.
Reed J. determined [at page 482] that AGT
engaged "in a significant degree of continuous and
regular interprovincial activity" and had, for that
reason, to be classified as a non-local undertaking
described in paragraph 92(10)(a). She reached
that conclusion notwithstanding the location in
Alberta of AGT's physical facilities because of the
manner in which the undertaking was operated,
thanks to AGT's participation in TCTS, as an
integral part of a national telecommunication
service.
Counsel for AGT contested that conclusion; he
submitted that the Judge had confused the nature
of the undertaking of AGT with that of the ser
vices provided to its customers. There is no doubt,
said he, that AGT's customers, by reason of the
contractual arrangement made by AGT with other
telecommunication companies, do get national and
international services. However, according to him,
in order to characterize AGT's undertaking, one
should look only at the part played by AGT in
providing those services without considering what
is done by other companies. If the problem is
viewed in that light, said counsel, it becomes obvi
ous that AGT's activities are purely local.
I do not agree with that argument. Reed J., as I
read her reasons, did not base her conclusion on
the nature of the services provided by TCTS but
on the fact that AGT's undertaking was operated
as an integral part of a national telecommunica
tion system. That fact was not seriously challenged
before us and, in my opinion, supported her con
clusion. But even if it did not, her conclusion
could, in my view, be sustained on another ground.
In operating its undertaking, AGT regularly
makes use of its microwave towers to send mes
sages to points located outside of Alberta. That
shows clearly, in my view, that AGT's undertaking
is not purely local but is an undertaking which
connects Alberta with other provinces.
For these reasons, I am of the view that the
Trial Judge correctly held that the undertaking of
AGT was not a local undertaking.
This first finding would normally lead to the
conclusion that AGT is subject to the federal
legislation relating to telecommunication compa
nies and, more particularly, to the provisions of the
Railway Act dealing with that subject. However,
as I have already said, the Trial Judge decided
otherwise because, in her view, AGT, being an
agent of the Crown, is not bound by the relevant
provisions of the Railway Act. That is the part of
her decision that is challenged by the appellant.
II—IS AGT BOUND BY THE RELEVANT PROVI
SIONS OF THE RAILWAY ACT?
AGT is expressly made an agent of the Crown
by subsection 42(1) of the Alberta Government
Telephones Act:
42(1) The commission is an agent of the Crown in right of
Alberta and its powers may be exercised only as an agent of the
Crown.
It follows, according to the judgment under
attack, that AGT benefits from Crown immunity
and, more particularly, from the rule enunciated in
section 16 of the Interpretation Act: 2
2 R.S.C. 1970, c. I-23. Section 16 is a statutory reformulation
of the common law rule expressed in Province of Bombay v.
Municipal Corporation of the City of Bombay and Another,
[1947] A.C. 58 (P.C.). It is the traditional view that a refer
ence to Her Majesty in a federal statute is a reference to the
"provincial Crowns" as well as to the "federal Crowns";
according to that view, the "provincial Crowns" and the "feder-
al Crowns" may invoke the protection of section 16. If that
view were considered to be incorrect and, if, as a consequence,
the reference to Her Majesty in section 16 were held to be a
reference only to Her Majesty in right of Canada, it seems that
the "provincial Crowns" would nevertheless be entitled to rely
on the common law rule expressed in the Bombay case. (See
Her Majesty in right of the Province of Alberta v. Canadian
Transport Commission, [1978] 1 S.C.R. 61.)
16. No enactment is binding on Her Majesty or affects Her
Majesty or Her Majesty's rights or prerogatives in any manner,
except only as therein mentioned or referred to.
As, in the opinion of the Trial Judge, the Crown
is neither mentioned nor referred to in the Railway
Act, she concluded that the Crown and her agents,
like AGT, are not bound by it.
Counsel for the appellant attacked that conclu
sion on two grounds. First, and that was his main
argument, he argued that AGT could not claim
Crown immunity as an agent of the Crown
because in operating its undertaking it had stepped
outside the purposes it was empowered to pursue;
second, he said that, assuming that AGT is en
titled to Crown immunity, it is nevertheless bound
by the Railway Act because the terms of that Act
make clear that it was the intention of Parliament
that the Crown be bound by it.
I will deal first with that last contention that the
Crown is bound by the Railway Act. Counsel
supported it by two arguments: one based on the
decision of the Supreme Court in The Queen in the
Right of the Province of Ontario v. Board of
Transport Commissioners; 3 the other founded on
the wording of section 5 of the Railway Act.
It is true that the Supreme Court decided in
1968 that section 16 of the Interpretation Act did
not prevent the Railway Act from applying to Her
Majesty in the right of Ontario. However, that
decision has no application here since the text of
section 16 that was applicable in that case was
different from the text of the present section 16. 4
As to the other argument of the appellant, it
rests on the text of section 5 of the Railway Act
which provides that:
3 [1968] S.C.R. 118.
4 See: Her Majesty in right of the Province of Alberta v.
Canadian Transport Commission, [1978] 1 S.C.R. 61, at
page 75.
5.... this Act applies to all persons ... within the legislative
authority of the Parliament of Canada ... except Government
railways ....
According to the appellant, the express excep
tion of "Government railways", which are railways
owned by Her Majesty in right of Canada, would
have been unnecessary if the word "persons" in
section 5 did not include Her Majesty. The answer
to that argument is, in my view, that the exception
in question is perhaps necessary. But our statutes
are replete with provisions and exceptions that are
not strictly necessary and are inserted "ex abun-
danti cautela". I cannot, therefore, infer from the
presence of that exception in section 5 that Parlia
ment clearly intended the Railway Act to apply to
the Crown.
The appellant's principal argument was, as I
already said, that AGT could not claim Crown
immunity as an agent of the Crown. In the appel
lant's submission, the decision of the Supreme
Court in R. v. Eldorado Nuclear Ltd.' is authority
for the proposition that when a legislature enacts a
provision expressly making a corporation an agent
of the Crown, that corporation is entitled to the
benefit of the Crown immunity from the operation
of statutes only when it is acting within the scope
of the public purposes it is statutorily empowered
to pursue. In the present case, says counsel, an
examination of the main provisions of the Alberta
Government Telephones Act shows that AGT was
created for the purpose of operating a purely
provincial undertaking and that the legislature
never anticipated that it would operate an under
taking of the type described in paragraph
92(10)(a) of the Constitution Act, 1867; it follows,
in his submission, that AGT, in operating its
undertaking as it did, went outside of the public
purposes it was empowered to pursue and, because
of that, cannot claim the benefit of the Crown
immunity.
The answer of counsel for AGT to that argu
ment was that in constructing and operating its
undertaking AGT was exercising the very powers
that were granted to it by the Alberta legislature.
It is first necessary to turn to the decision of the
Supreme Court in R. v. Eldorado Nuclear Ltd. In
5 [1983] 2 S.C.R. 551.
that case, two companies, Eldorado Nuclear Lim
ited and Uranium Canada Limited, were charged
with having conspired with others to lessen compe
tition unduly in the production or sale of uranium
products in Canada contrary to paragraph
32(1)(c) of the Combines Investigation Act. 6
There were statutory provisions making both com
panies agents of Her Majesty. Those two statutory
provisions were similar; they both provided that
the company [see page 565 of Eldorado]:
... is for all its purposes an agent of Her Majesty and its
powers may be exercised only as an agent of Her Majesty.
The problem before the Court was whether the
two companies were immune from criminal liabili
ty under paragraph 32(1)(c) of the Combines
Investigation Act because they were agents of the
Crown. The Court answered that question in the
negative. Mr. Justice Dickson (as he then was),
who gave the reasons of the majority of the Court,
first determined that the Combines Investigation
Act did not bind the Crown. He then turned to the
question whether the two companies concerned
were entitled to Crown immunity. After recalling
that section 16 of the Interpretation Act extends to
agents of the Crown, he quoted the two statutory
provisions making Eldorado Nuclear Limited and
Uranium Canada agents of the Crown and said [at
pages 565-566]:
The fact that these statutory provisions make each of the
respondent Corporations "for all its purposes" an agent of the
Crown does not mean, however, that these Companies act as
Crown agents in everything they do.
Statutory bodies such as Uranium Canada and Eldorado are
created for limited purposes. When a Crown agent acts within
the scope of the public purposes it is statutorily empowered to
pursue, it is entitled to Crown immunity from the operation of
statutes, because it is acting on behalf of the Crown. When the
agent steps outside the ambit of Crown purposes, however, it
acts personally, and not on behalf of the state, and cannot claim
to be immune as an agent of the Crown. This follows from the
fact that s. 16 of the Interpretation Act works for the benefit of
the state, not for the benefit of the agent personally. Only the
Crown, through its agents, and for its purposes, is immune from
the Combines Investigation Act.
6 R.S.C. 1970, c. C-23.
Dickson J. then referred, as an authority sup
porting that approach, to the decision of the Court
in Canadian Broadcasting Corporation, Television
Station C.B.O.F.T. et al. v. The Queen,' where the
CBC, which the Broadcasting Act [R.S.C. 1970, c.
B-11] made a Crown agent "for all purposes of
this Act", sought immunity in relation to charges
of showing an obscene film contrary to subsection
159(1) of the Criminal Code [R.S.C. 1970, c.
C-34]. The Court held that the CBC could be
prosecuted under the Criminal Code because, in
broadcasting an obscene film, the Corporation had
not acted for the purposes entrusted to it under the
Act since a Regulation adopted under that Act
prohibited the broadcast of any "obscene, indecent
or profane . .. presentation". Mr. Justice Dickson
recalled [at pages 566-567] that in that case [at
page 353] the Court had expressly adopted the
following passage from the judgment of the
Ontario Court of Appeal [(1980), 30 O.R. (2d)
239, at page 244]:
In my view, when the Corporation exercises its powers with a
view to carrying out the purposes of the Broadcasting Act, it
acts as agent of Her Majesty and only as agent of Her Majesty.
But, when it exercises its powers in a manner inconsistent with
the purposes of the Act, it steps outside its agency role. That
role subsists only so long as the Corporation's broadcasts are
implementing the policy laid down in the Act. This seems to me
to be the effect of s. 40(1).
Having stated those premises, Dickson J. exam
ined the objects of the two companies in question
as they were set out in their letters patent and,
from that examination, concluded that the compa
nies had acted within their purposes and were,
therefore, entitled to immunity as Crown agents.
Are the principles stated in that decision appli
cable to this case?—I can find only one reason
why they might not be; that reason is that the
statutory provision that makes AGT an agent of
the Crown is not couched in the same language as
those that were applicable to the two companies
Mr. Justice Dickson was dealing with. In the case
of each one of those two companies, a statute
expressly provided that the company:
... is for all its purposes an agent of Her Majesty and its
powers may be exercised only as an agent of Her Majesty.
7 [1983] 1 S.C.R. 339.
Subsection 42(1) of the Alberta Government Tele
phones Act, which makes AGT an agent of Her
Majesty, is differently worded; it says:
42(1) The commission is an agent of the Crown in right of
Alberta and its powers may be exercised only as an agent of the
Crown.
AGT, therefore, was made an agent of the Crown;
it was not expressly made an agent of the Crown
"for its purposes". Does it follow that AGT is
entitled to invoke its status of an agent of the
Crown even if it does not act for the purposes for
which it was created?—I do not think so. In my
opinion, when a legislature creates a corporation
for certain purposes and makes it an agent of the
Crown, it must be assumed that the legislature did
not intend the corporation to act as an agent of the
Crown if it "stepped outside the ambit of the
purposes for which it was created". In my view,
the words "for its purposes" are to be implied in
subsection 42(1) and, for that reason, I consider
that the principles enunciated by Mr. Justice Dick-
son in Eldorado are applicable to this case.
It now becomes necessary, therefore, to deter
mine whether AGT exercised its powers in a
manner inconsistent with the purposes for which it
had been created so as to lose its status of a Crown
agent. In order to resolve that issue, one must
examine some of the provisions of the statute that
created AGT, the Alberta Government Telephones
Acts
1 In this Act,
(c) "system" means a telecommunication system and
includes all land, plants, supplies, buildings, works, rights,
franchises, easements, assets and property of every kind
owned, held, required or used for the purpose of, or in
connection with, or for the operation of the telecommunica
tion system;
(d) "telecommunication" means telecommunication as
defined in the Public Utilities Board Act.
2(1) The Minister is charged with the administration of this
Act.
(2) The Minister may control all telecommunication services
subject to the jurisdiction of the Legislature and may provide or
direct provision of all such services.
3(1) There is hereby established a commission under the name
of The Alberta Government Telephones Commission consisting
of the Minister, the executive officers and the persons from
8 R.S.A. 1980, c. A-23, as amended [by S.A. 1983, c. 5, ss. 2,
3, 4].
time to time appointed as members by the Lieutenant Governor
in Council.
(2) The commission is a corporation having capacity to acquire,
hold and alienate real property.
(3) The commission may also be known as the "Alberta
Government Telephones".
4(1) The Commission may purchase, construct, extend, main
tain, manufacture, operate and lease to and from other persons,
a system or systems in Alberta, including private communica
tion systems.
9(1) The commission shall
(d) prepare from time to time schedules of rates for filing
with or approval by the Public Utilities Board ...
24 The commission may enter into an agreement with any
person providing for the connection, intercommunication, joint
operation, reciprocal use or transmission of business between
any systems owned or operated by the parties thereto and for
any consequent division of receipts, expenditures or profits or
any financial or other adjustments that may be advisable or
necessary for the purposes of the agreement.
42(1) The commission is an agent of the Crown in right of
Alberta and its powers may be exercised only as an agent of the
Crown.
As to the Public Utilities Board Act, 9 to which
the Alberta Government Telephones Act makes
reference, it contains the following provisions:
1 In this Act,
(i) "public utility" means
(i) a system, works, plant, equipment or service for the
conveyance of telecommunications,
(j) "telecommunication" means a transmission, emission or
reception of signs, signals, writings, images, sounds or intelli
gence of any nature by wire, radio, visual or other electro
magnetic system;
70(1) This Part applies
(c) to all public utilities owned or operated by or under the
control of the Crown, or an agent of the Crown, in right of
Alberta;
77(1) The Board shall exercise a general supervision over all
public utilities, and the owners thereof, and may make any
orders regarding extension of works or systems, reporting and
other matters, that are necessary for the convenience of the
9 R.S.A. 1980, c. P-37.
public or for the proper carrying out of any contract, charter or
franchise involving the use of public property or rights.
81 The Board, either on its own initiative or on the application
of a person having an interest, may by order in writing, which
shall be made after giving notice to and hearing the parties
interested,
(a) fix just and reasonable individual rates, joint rates, tolls
or charges or schedules thereof, as well as commutation,
travel allowance and other special rates, which shall be
imposed, observed and followed thereafter by the owner of
the public utility;
It is apparent from those provisions that the
legislature of Alberta, in creating AGT, intended
that corporation to establish and maintain in the
province a telecommunication system that would
be regulated under the Public Utilities Board Act
of the province. As the only undertakings that may
be regulated under that Act are those that are not
described in paragraphs 92(10)(a),(b) and (c) of
the Constitution Act, 1867, it follows, in my view,
that the legislature intended AGT to operate a
local undertaking and that AGT, in operating a
federal undertaking, stepped outside of the author
ity of the purposes for which it was created. It
cannot, therefore, invoke its status of a Crown
agent so as to dodge the laws that are applicable to
federal undertakings.
I would, for these reasons, allow the appeal, set
aside the order of the Trial Division and dismiss
the application of Alberta Government Telephones
for a writ of prohibition. I would order Alberta
Government Telephones to pay the costs of the
appellant both in this Court and in the Trial
Division but would not make any order as to the
costs of the other parties.
HEALD J.: I concur.
* * *
The following are the reasons for judgment
rendered in English by
URIE J.: I agree with the disposition of the
appeal proposed by Mr. Justice Pratte and with his
reasons therefor.
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